Supreme Court Says It's Still Inducement Even If You Proactively Took Steps To Make Sure You Weren't Infringing

from the this-is-not-good dept

A blog post by Skip Oliva alerts us to a very troubling Supreme Court ruling in a patent lawsuit that is going to have massive, dangerous unintended consequences -- as pointed out by the lone dissenter, Justice Kennedy. Effectively, the ruling claims that even if you had no idea that a patent existed, if you sell products to other businesses for resale, and it later turns out that those products infringed on a patent, you could be liable for "inducement" to infringe. It's hard to see how this makes any sense at all.

First, the facts of the case. SEB created a deep fryer and got a patent on it. Entirely separate from this, Sunbeam decided it wanted a certain type of deep fryer that apparently had similarities to what SEB made. This isn't surprising. As we've discussed before, it's quite common that multiple individuals/companies have the same idea at the same time. Sunbeam contracted out to appliance maker Pentalpha to make a deep fryer to its own specifications. Pentalpha, in researching the market, came across an SEB deep fryer that had no US patent markings on it, and built its own deep fryer, potentially using some of what it learned from the SEB deep fryer. Separately, it asked an attorney to do a patent search to see if its own deep fryer violated any patents -- and the attorney's search turned up nothing.

Eventually, SEB sued Sunbeam, who eventually settled. After that, SEB went after Pentalpha claiming inducement to patent infringement, claiming that Pentalpha was "inducing" anyone who resold this model of deep fryer (by this point, the company had a few other customers besides Sunbeam) to infringe on SEB's patent. Logically, this makes no sense. Pentalpha had no knowledge of the patent in question and even had a lawyer do a search which failed to turn up anything. While you could claim that Pentalpha was guilty of straight up patent infringement, claiming "inducement" seems ridiculous.

Not to the courts, however. Following both the District Court and the Appeals Court (CAFC, natch), the Supreme Court found that the inducement claim holds, citing "willful blindness."

This is the point where you shake your head in disbelief.

How could this possibly be willful blindness when the company literally went out and hired someone to do a patent search which came up blank? And then, even if you grant the premise that there was "willful blindness" in finding the patents (even though they looked), the Supreme Court went even further in saying that "willful blindness" was the equivalent of full-on knowledge of that which you were being blind to. That's because for inducement to apply, the accused has to have actual knowledge that the product is infringing. Think about that for a second. Willful blindness normally means that you purposely chose not to seek out some information because you didn't want to know the answer. But that's very different than saying that's the equivalent of having that knowledge in the first place. And yet, that's what the court did here.

Yet the Court does more. Having interpreted the statute to require a showing of knowledge, the Court holds that willful blindness will suffice. This is a mistaken step. Willful blindness is not knowledge; and judges should not broaden a legislative proscription by analogy. See United States v. Jewell, 532 F. 2d 697, 706 (CA9 1976) (en banc) (Kennedy, J., dissenting) (“When a statute specifically requires knowledge as an element of a crime, however, the substitution of some other state of mind cannot be justified even if the court deems that both are equally blameworthy”) In my respectful submission, the Court is incorrect in the definition it now adopts; but even on its own terms the Court should remand to the Court of Appeals to con-sider in the first instance whether there is sufficient evidence of knowledge to support the jury’s finding of inducement.

Later he notes that, even if a company were to assume that something likely is patented, it can later do research and conclude otherwise, as was done here. Thus, to claim that there was "knowledge" of infringement, to the level to reach inducement is a massive stretch. Kennedy highlights just how problematic this is, in that it now allows juries to pretend they can step into someone's mind to determine if they "knew" something, based solely on the fact that they sought not to find out that information:

Circumstantial facts like these tend to be the only available evidence in any event, for the jury lacks direct access to the defendant’s mind. The jury must often infer knowledge from conduct, and attempts to eliminate evidence of knowledge may justify such inference, as where an accused inducer avoids further confirming what he already believes with good reason to be true. The majority’s decision to expand the statute’s scope appears to depend on the unstated premise that knowledge requires certainty, but the law often permits probabilistic judgments to count as knowledge.

And this will likely have impacts beyond just patent law. The "inducement" concept is specifically written into patent law... but not into copyright law. In fact, the case law "invention" of inducement in copyright law relied heavily on what was in patent law. That means... this ruling almost certainly would be equally applicable to copyright law as well. Considering all the concerns people already have about orphaned works, think of the massive chilling effects and unintended consequences here. If someone were to make use of a work which they believed to be free of copyright, and even if they had a lawyer declare it free of copyright... if a jury then decides magically instead that they were "willfully blind" and should have known that the work was covered, they may now be liable for inducement as well! That's a massive extension of inducement theory.

Even worse, this appears to go beyond just the realm of intellectual property. Justice Kennedy was particularly spooked by the fact that this ruling -- in a very narrow area of civil law -- likely also applies to criminal law, without any thought at all given to what this might mean in the criminal context:

The Court appears to endorse the willful blindness doctrine here for all federal criminal cases involving knowledge. It does so in a civil case where it has received no briefing or argument from the criminal defense bar, which might have provided important counsel on this difficult issue.

Yes, based on this particular ruling in a patent case, "willful blindness" may be the equivalent of "actual knowledge," which makes no sense at all. Honestly, it seems the only truly "willful blindness" in this case is from the eight justices who seem to be totally blind to the massive chilling effects this will have.

Re: Re:

Be Afraid, be VERY Afraid....

This court has had a run of truly horrible rulings. Corporations as persons get unlimited speech in political campaigns?

Now willful blindness is the same as knowledge? Doesn't this mean that all patent infringement is subject to triple damages? Because even if you do a patent search that comes up empty, shouldn't you have known anyway?

And what about any company now selling a smart phone? They all know they are infringing on patents... There are too many, and nobody has them all. Doesn't this immediately bankrupt all smart phone companies?

Re: Be Afraid, be VERY Afraid....

"Now willful blindness is the same as knowledge? Doesn't this mean that all patent infringement is subject to triple damages? Because even if you do a patent search that comes up empty, shouldn't you have known anyway?
"

No, that is not what this means. It means that if you intentionally try to blind yourself to results of a duly performed search then you could be liable as an infringer by having induced infringement.

Be clear, this case was not about the triple damages provision of willfully infringing, that is a separate issue.

Re: Re: Be Afraid, be VERY Afraid....

That's right, but this is still a bad ruling. Pentalpha performed a search and came up empty. Then SEB, not a troll because they actually had a product, shows up waving a patent and accuse Pentalpha of inducing by selling a competing product. One which, as far as anyone could tell, there were no patents to violate.
Willful blindness shouldn't apply here because Pentalpha didn't ignore all the patents it found, they didn't find any patents to begin with! It should be kicked back in SEB's face for not publicizing their patent and make them duke it out on the store shelves.

Re: Re: Re: Be Afraid, be VERY Afraid....

And your insight below throws most of my argument out the window. I still think a patent attorney worth his paycheck should have still found the applicable patents with or without the company pointing him in the right direction.

Re: Re: Re: Re: Be Afraid, be VERY Afraid....

"I still think a patent attorney worth his paycheck should have still found the applicable patents with or without the company pointing him in the right direction."

and why should people have to waste money hiring patent attorneys before inventing and innovating? That money can better go into providing for more innovation and better products.

That's a problem with the patent system. No one can do much because someone has a patent on almost everything imaginable and people must spend tons of resources just to avoid being sued by frivolous lawyers that contribute nothing.

Re: Re: Re: Re: Be Afraid, be VERY Afraid....

No, this was just a terrible patent. No patent was needed for this idea to take place, it would have taken place perfectly fine without the patent. So why was a patent granted on this idea to begin with? Patents should only be granted on inventions that wouldn't be invented otherwise.

Re: Be Afraid, be VERY Afraid....

"And what about any company now selling a smart phone? They all know they are infringing on patents... There are too many, and nobody has them all. Doesn't this immediately bankrupt all smart phone companies?"

No it does not bankrupt them. They all know they are infringing on patents, but they do not know specifically which ones (or at least there will likely be no evidence at a patent infringement trial that they knew about the specific patent at issue in that specific trial).

And again, you have to remember, this is a decision about INDUCING INFRINGEMENT ONLY. It does not materially affect other facets of patent litigation, at least it doesn't appear to from a legal point of view.

Re: Be Afraid, be VERY Afraid....

It appears that the Supreme court by not having received any briefing or arguments from a defense bar that could have offered or rendered council are essentially willfully blind as it were to any sound justification for their own precedent ruling. It just keeps getting worse, handing America up on a platter..

Mike, you appear to have not read the entire Federal Circuit opinion on the matter. I'm not sure if the USSC opinion tells all the facts upon which this decision was reached.

The situation was a bit more nuanced than you apparently know about, or at least that you've told about in your article.

The factual situation in this case was that the people accused of inducing infringement were well aware that the other people (who, as it turns out are patentees) were making these products, and rightfully would have assumed that they would have at least tried to patent it since they were very new designs for products (deep fryers to be exact). The accused folks did hire a patent attorney to do a clearance search BUT and here's the big ol' BUT they totally neglected to tell the attorney "oh hey btw, we already know who probably tried to patent this thing because they've been making it for awhile". That is, they did not point the attorney they hired in the right direction and just set him off searching. In effect they were attempting to get him to do a search that missed the competitor's having patented the article and issue them a clearance opinion.

That little omission pissed the justices off. Most of them were visibly perturbed at oral arguments when I was there. So, they held that "willful blindness" as here, where they willfully withheld the information which they already knew would be invaluable to a patent attorney doing a clearance search in order to put on airs that they did their due diligence looking around for art but WHOOPSIE just couldn't find it, was "knowledge" for purposes of this statute.

That said, I feel like it was a decision rendered because they were pissed off at the particular bad actor in front of them and that the dissent was correct that "willful blindness" is not "knowledge". Period. End of story.

Though, if congress wants to they can simply tack "actual" on in front of "knowledge" and solve the whole issue.

Re:

I'm glad someone pointed this out.

It's perfectly valid to have misgivings about the whole "inducement" liability--third-party liability is inherently problematic. And it's also perfectly acceptable to have misgivings about how this ruling will (very likely) be twisted to regard insufficient due diligence as "willful infringement." However in this particular case (see http://arstechnica.com/tech-policy/news/2011/06/scotus-willful-blindness-to-patent-infringement-not- ok.ars), it's pretty clear that this is actually a case where the law worked as it was intended to work. It really does appear that the company deliberately infringed on the SEB patent and tried to make a patsy out of a legal advisor to suggest the contrary. If there is a reasonable inducement case, this one appears to be it.

Personally, I'd much rather this have been pursued under a claim of fraud by Sunbeam against Pentalpha. I don't think inducement-to-infringe is really necessary, but the law being what it is, this one doesn't stink as badly as it's made out to.

Re:

I'll defer to people who are more well-versed in the particulars of the case, but a question comes to mind: if this were a case of bad actors playing games with the letter of the law, it should have become obvious prior to this final hearing; that and the notion that this is a very ambiguous and convoluted situation badly suited to clearly defining the intention and correct application of the law might have dissuaded the Supreme Court from taking the case and creating more confusion with their ruling. That may seem selfish to a rightfully worried appellant but given the state of copyright/patent/IP law in this country right now it's eggshells, every single step, every day of the week.

Re: Re:

The USSC apparently took the case to state a standard for inducement more stringent than the "knew or should have known standard" applied by the CAFC. In this regard it did represent a narrowing of CAFC case law.

Re:

Re:

Mr. "6",

Like you I was taken aback by the recital of facts here and the respective recitals in the CAFC and USSC decisions.

For example, I recall no mention of the defendant having peformed "market research", a term used here that is then followed by the all too familiar "lotsa people come up with the same idea contemporaneously". All the recitals said was that the defendant purchased an SEB device in Hong Kong and copied it in all salient respects.

Yes, an attorney in the US was asked by the defendant to "clear" the devices it was selling to other US retailers. Of course, the defendant neglected to mention that it had created its product based upon the plaintiff's product. Color me silly, but this does seem to be a rather important and material fact when asking for an opinion by counsel. Imagine trying to pull something like this during prosecution before the USPTO.

What really piqued my interest here was that the defendant was found liable (and willfully so) at the trial court level under both 271(a) and 271(b). If there was an undisputed and independent basis for sustaining a decision below, why did the USSC even grant cert.? It took a bit of digging to realize that this case arose from a jury instruction that this not request the jury to separately consider direct infringement and contributory infringement. Let this be a lesson to you should you ever engage in trial practice. Jury instructions count, and proposed instructions should be crafted with care (just like claims in an application).

Much is being made here of Justice Kennedy's dissent (and virtually nothing being made of the majority opinon by the 8 remaining Justices). In the final analysis what Justice Kennedy was saying is that he was reluctant to simply join the majority opinion because he believed the more proper and prudent course was to remand the case back to the CAFC for further deliberations that would by necessity be more narrow in scope, thus avoiding a broad-based rule that could have unknown consequences in matters of criminal law, as opposed to the civil matters presented in the case.

Thus, Justice Kennedy's dissent is in my view quite a bit different than is being characterized here.

Of course, when the dust all settles the simple fact remains that the defendant remains liable for direct infringement, and (perhaps a little less so) for inducing infringement.

Re: Re:

"If there was an undisputed and independent basis for sustaining a decision below, why did the USSC even grant cert.? "

There is a comment above by another poster that tells you why. In a nutshell the CAFC had a certain standard by which it had historically been judging whether or not someone could be found to have induced infringement. I forget off hand what that standard was, but now the standard is "willful blindness". In essence, the USSC granted cert so that it could decide whether or not it liked the federal circuit's standard. They didn't like it so they changed it.

Re:

The factual situation in this case was that the people accused of inducing infringement were well aware that the other people (who, as it turns out are patentees) were making these products, and rightfully would have assumed that they would have at least tried to patent it since they were very new designs for products (deep fryers to be exact).

Yes, I read this, but I have trouble with the "rightfully would have assumed." Why? Why must they assume that it would have been patented? That's the part that confuses me.

Re: Re:

Because any company that isn't reta rded will patent their new devices precisely so that they have a market advantage.

That's how we roll over in the Useful Arts Mike. We've been rolling like that for awhile and pretty much everyone involved in the Useful Arts knows it unless they're a small startup who just hasn't been educated (which they soon will be when they get hit with their first patent infringement allegation). In this particular case it was an established company that knew the rules of the game so well that they were intentionally playing the system.

This might be too complicated for you to understand without fully educating you on every little point behind the case, but suffice to say, this company knew it was up to no good and did it anyway. That's how the big boys used to roll. But now, the USSC says nope, we don't like that and busted these guys, which will probably curtail others from doing the same.

Like I said though, I don't agree with the decision, but it is what it is. Congress can overrule it if they want to by adding one word to the statute. Patent reform is pending in congress right now.

Re: Re: Re: Re:

Re: Re: Re:

"Because any company that isn't reta rded will patent their new devices precisely so that they have a market advantage."

I think that's part of the problem with our IP laws. The fact is that new inventions and innovations have occurred perfectly fine without patents. If patents were abolished, inventions and innovations would continue to occur. The USPTO should only grant patents on inventions that won't occur otherwise. Instead, it grants patents on anything, no matter how obvious, so long as it is 'new' (and even if it's not new, that's no guarantee that no patents will be granted).

The patent system needs to do a better job at distinguishing what inventions need a patent to emerge and what inventions don't. Assuming that all new inventions require patents is absurd and unevidenced. No one is entitled to a government imposed monopoly, these things should only exist to the extent that they promote the progress. The founding fathers were very skeptical of IP and they stressed that it should only be used very sparingly. It should be the exception, not the rule, but in today's corrupt world, it's the rule and not the exception.

Re: Re: Re:

Because any company that isn't reta rded will patent their new devices precisely so that they have a market advantage

That's incredibly offensive. Lots of companies recognize that you can have a market advantage without patents, and that patents generally are a waste of time and money.

Claiming that all companies automatically patent their inventions is ridiculous, false, and suggests a warped view of the tech world.

That's how we roll over in the Useful Arts Mike. We've been rolling like that for awhile and pretty much everyone involved in the Useful Arts knows it unless they're a small startup who just hasn't been educated (which they soon will be when they get hit with their first patent infringement allegation).

All that reads to me is that you're a part of a corrupt, broken and wasteful system.

And, seriously, if someone gets hit with a patent infringement lawsuit (and I know plenty of people who have), you're wrong. Most of them that I know then HATE the system even more. It doesn't make them any more interested in getting a patent for "a market advantage."

This might be too complicated for you to understand

Condescension does not look good on you.

I understand what this case is about. And, I disagree that the company "knew" it was up to no good. There simply is not enough evidence to support that claim, as Justice Kennedy noted.

Re: Re: Re: Re:

Could you please name a large company that doesn't patent all of its new products? Enough that the default wouldn't be "they probably have a patent on it?" Your slinging your world view around as if its held by everyone, please give us some evidence.

Re: Re: Re: Re: Re:

"Could you please name a large company that doesn't patent all of its new products"

Why should we have a patent system that grants patents on all 'new' products. Not all new products should be given patents, only products that wouldn't emerge otherwise. Innovation has occurred perfectly fine in the past without patents and it will continue to occur without them. No one is entitled to a monopoly, these things should be granted only to the extent that they promote the progress. A patent system that assumes that all new inventions are patent worthy is absurd and only hinders innovation.

So then you almost admit that patents aren't about protecting the little guy, they're about protecting large companies. It's the big corporations that want these laws, they're for the big corporations, by the big corporations.

and Google has had a history of not patenting everything. They kinda regret it now, because others with patents turned out to sue them for patents that Google should have gotten a long time ago, not to mention it gives Google less ammunition to counter - sue.

Sure, many companies patent new ideas, but that hardly means they agree with the patent system. Often times they patent ideas to avoid being sued or to be able to counter-sue those that sue them.

"Your slinging your world view around as if its held by everyone"

Your world view is held primarily by big corporations, as you seem to admit, because it's a worldview that benefits big corporations at public expense. Just because big corporations hold a world view doesn't make it any more valid or widely accepted. and that's not to mention all the resources and efforts that big corporations expend to socially engineer everyone else into thinking that IP is good (often by getting laws passed that effectively propagate mostly one side of the issue while censoring others. IE: big corporations have huge government imposed monopoly controls over various information distribution channels and they use that influence to express only their side of the issue, they use their influence to indoctrinate students, etc...).

Our world view is the far more realistic and reasonable one, it just doesn't get as much attention because big corporations with lots of money don't hold it and they seek to censor it and to spend tons of resources ensuring that their world view does get attention (actually, big corporations internally know that their world view isn't in the public interest and is wrong, they just don't care).

Re: Re: Re: Re: Re: Re: Re:

Well, idk about "big companies" necessarily, more like "people in the useful arts". Those people happen to own/work at big companies quite often though. The patent laws protect the little guy just as much as they do the big guy. If the little guy has money that is.

Re: Re: Re: Re: Re: Re: Re: Re: Re:

Re: Re: Re: Re:

"Lots of companies recognize that you can have a market advantage without patents, and that patents generally are a waste of time and money."

If that is their position then that's cool. Even so, if you're their competitor and you're concerned about your new product maybe infringing some patents, then you might want to oh, I don't know, have your attorney search the company whose product you just blatantly copied.

And let's be clear, paying 2k (filing+issue fees) dollars for a patent is a pretty cost effective way to obtain a market advantage IN ADDITION to the ones they can otherwise obtain. If you have to pay lawyer fees etc. then that is up to you.

Re: Re: Re: Re:

"All that reads to me is that you're a part of a corrupt, broken and wasteful system."

Well that's your opinion. Imo, someone taking the time out of their day to explain to you their invention in a way that will enable you to make and use it is a decent trade for letting them use it for 20 years. That's what the patent system is about.

"And, seriously, if someone gets hit with a patent infringement lawsuit (and I know plenty of people who have), you're wrong. Most of them that I know then HATE the system even more. It doesn't make them any more interested in getting a patent for "a market advantage.""

That's probably because you odeal with the non-useful arts people like applications dev's, software geeks etc. I have never espouses patents covering software. Indeed, I say that they should not. That is my political view. And it is one I think you share. Never the less, some people have warped the patent system that was meant for the useful arts into something covering software authorship as well. The courts have not outlawed that completely and in recent years warm to the idea of such patents being just fine. Congressional action is needed.

On the other hand people in the useful arts generally do not hate the patent system quite so much once they realize that they can patent things too. Indeed, a small startup of my uncle's is this way. They don't like getting hit with the patent they're being hit with (especially since it seems they don't infringe anyway) but on the other hand they've started filing on all their new products.

Re: Re: Re:

"which they soon will be when they get hit with their first patent infringement allegation"

So then you're almost admitting that patents aren't about protecting startups, they're about protecting incumbents. They're about making the lives of newcomers so difficult that it would deter them from success and protect incumbent businesses.

and then IP maximists will turn around and claim, "but the newcomers need protection. Patents are about the little guy". It's a lie and they know it.

This patent issue is a serious problem. It poses huge negative consequences on new businesses. IP maximists will claim, "no, the impacts are minimal. The system works, hardly anyone is affected" but now they're turning around and claiming that any newcomer will soon find out about the patent system. If that's the case, if the patent issue is that bad and if its impacts are that ubiquitous, then that's evidence of its widespread negative impact. When someone has a patent on any idea that any startup can think of, which seems to be what's being almost admitted here, that will harm any startup that comes up with any idea whatsoever. The patent system shouldn't be about harming anyone that comes up with any idea, it should be about encouraging more innovation and a better marketplace for consumers.

Re: Re: Re: Re:

Re: Re: Re: Re:

If you want to create jobs and spur innovation, abolish patents. Patents are government imposed monopolies and government imposed monopolies cost jobs, they reduce aggregate output, and they increase prices. Patents do have a huge negative economic effect.

A huge part of the problem with the U.S. and its economy is that the government has turned into a government that protects incumbent monopolists at public expense. This is bad for jobs, it's bad for innovation, it's bad for the economy, and it's bad for the public. It only benefits monopolists.

Re: Re:

You're not confused at all. He just told you. "Since they were very new designs for products." Indeed, do you have any examples of a similar situation and the company *didn't* have a patent?

You presented no quotes from the other 8 judges, just the one dissenter- whose view on the subject you use to support your hatred of intellectual property. It is beyond tiresome to read your increasingly lunatic fringe posts about any and all IP law.

Re: Re: Re:

Re: Re:

Yes, I read this, but I have trouble with the "rightfully would have assumed." Why? Why must they assume that it would have been patented? That's the part that confuses me.

Did you actually read the case? See pages 15 and 16 of the slip opinion:

"SEB’s cool-touch fryer was an innovation in the U. S. market when Pentalpha copied it. App. to Brief for Respondent 49. As one would expect with any superior product, sales of SEB’s fryer had been growing for some time. Ibid. Pentalpha knew all of this, for its CEO and president, John Sham, testified that, in developing aproduct for Sunbeam, Pentalpha performed “market research” and “gather[ed] information as much as possible.” App. 23a. Pentalpha’s belief that SEB’s fryer embodied advanced technology that would be valuable in the U. S. market is evidenced by its decision to copy all but the cosmetic features of SEB’s fryer.

Also revealing is Pentalpha’s decision to copy an overseas model of SEB’s fryer. Pentalpha knew that the product it was designing was for the U. S. market, and Sham—himself a named inventor on numerous U. S. patents, see id., at 78a–86a—was well aware that products made for overseas markets usually do not bear U. S. patent markings, App. in No. 2009–1099 etc. (CA Fed.), pp. A–1904 to A–1906. Even more telling is Sham’s decision not to inform the attorney from whom Pentalpha sought a right-to-use opinion that the product to be evaluated was simply a knockoff of SEB’s deep fryer. On the facts of this case, we cannot fathom what motive Sham could have had for withholding this information other than to manufacture aclaim of plausible deniability in the event that his company was later accused of patent infringement. Nor does Sham’s testimony on this subject provide any reason to doubt that inference. Asked whether the attorney wouldhave fared better had he known of SEB’s design, Shamwas nonresponsive. All he could say was that a patent search is not an “easy job” and that is why he hired attorneys to perform them. App. 112a.

Taken together, this evidence was more than sufficient for a jury to find that Pentalpha subjectively believed there was a high probability that SEB’s fryer was patented, that Pentalpha took deliberate steps to avoid knowing that fact, and that it therefore willfully blinded itself to the infringing nature of Sunbeam’s sales."

Re:

So I tell my lawyer to research patents on product X, where only a limited set Y of companies make X, the lawyer STILL doesn't find anything and I am the bad guy? Why am I paying him if I have to tell him where to look? A clean-room approach seems like the right way to proceed so that his search is not tainted.

Seems like either my lawyer owes my money back since he couldn't find hay on a hayride or the patent system is broke if you can't find patents for a simple deep fryer!

Re: Re:

The quality of the search is something which is wholly outside of your hands save in so far as you get to pick the firm and you get to pester your hired searcher. Most people are so ignorant about searching they wouldn't know a good search from a bad search if the bad search slapped them in their privates.

"Why am I paying him if I have to tell him where to look? "

Because he's still going to be doing a better job than you. And because his written clearance opinion might help you if you're being sued for willful infringement or willfully inducing infringement (as in this case). Of course, if you pull a stunt like these guys did it probably won't help you.

Re:

The factual situation in this case was that the people accused of inducing infringement were well aware that the other people (who, as it turns out are patentees) were making these products, and rightfully would have assumed that they would have at least tried to patent it since they were very new designs for products (deep fryers to be exact).

Why should you have to assume that a company making something as simple as a deep fryer has a patent on it? What's so special about this deep fryer that deserves a patent?

The accused folks did hire a patent attorney to do a clearance search BUT and here's the big ol' BUT they totally neglected to tell the attorney "oh hey btw, we already know who probably tried to patent this thing because they've been making it for awhile".

Aren't patents supposed to be very clear on what they cover to someone knowledgeable in the art? Shouldn't it be clearly obvious on even a cursory search?

That said, I feel like it was a decision rendered because they were pissed off at the particular bad actor in front of them

And now it becomes case law that can be used to extort money from those who are innovating?

Though, if congress wants to they can simply tack "actual" on in front of "knowledge" and solve the whole issue.

I'm not a lawyer, so I have a hard time wrapping my head around the difference between "knowledge" and "actual knowledge." Is there "fake knowledge" in the eyes of the law?

Re: Re:

Re: Re:

"I'm not a lawyer, so I have a hard time wrapping my head around the difference between "knowledge" and "actual knowledge." Is there "fake knowledge" in the eyes of the law?"

Adding "actual" in front would simply make the courts understand that congress intends for the person who is accused of inducing infringement actually know, specifically, about the patent at issue. The courts have mangled their interpretation of "knowledge" to no end over the years. But there's nothing you or I can do about it. Congress could define the term "knowledge" in the statute instead of adding "actual", and congress does that sometimes.

And just to be clear, anyone reading this thread that does not understand the difference between direct infringement and inducing infringement may as well just move on to the next thread. This is a very specific ruling about a very obscure point of patent law that will likely never affect you in any way shape or form.

The only thing that is even a tiny bit disturbing is outside the patent context "knowledge" might be found when one is "willfully blind" to obtaining the knowledge when it would otherwise be found out by you. And that is not likely to happen in many other contexts. The reason it happened here was because the justices were pissed at this particular bad actor and other hypothetical bad actors like them.

To be sure, your average techdirter person would, if they understood the case, probably not be very happy with what the accussed infringer did either. Although they may have still come down on the side of the dissent as I certainly would.

Re:

Mike - am with you 99% of the time, but as has been pointed out above, the facts here are important. Pentalpha bought a SEB (T-fal) cool touch deepfryer (the technology), took it apart and learned how to make one themselves. They then paid a patent lawyer to conduct an intentionally ineffective patent search so they could claim they didn't know there were any patents. The one thing that isn't clear in the record is whether t-fal acutally stamped the patent number or patent pending on any of the parts, as is often done, but either way, Pentalpha clearly knew that they were dealing with a novel, patented product and did everything they could to get around the patent system. This is a special kind of willfulness that I can't say I'm sad to see smacked down - it sounds like justice.

Re: One aspect of this case gets me...

With that everyone can pretty much agree. The need for better searching is well known within the patent community. Google has helped out some in my art, but it is less effective in other arts. There is definitely a need for better searching techniques as the old ones get less and less effective as time goes by and the volume and diversity of art goes up.

Re: Re: One aspect of this case gets me...

Prior to the advent of database searches, there was a very reliable, albeit archaic, system in place at the USPTO that was based upon the its classification system, i.e., "bins". It was not at all difficult to use, and generally provided a variety of actually relevant references, as opposed to the endless lists of largely irrelevant references that turn up using a database search.

BTW, not once in 32 years of practice have I ever had a search conducted without first running things by a Primary Examiner in the relevant Art Unit(s). There is no substitute for those having the experience of "been there, done that". While some relevant references later turned up during prosecution, most were usually cumulative and added nothing of a substantive nature.

Of course, in some subject matter areas I dispensed with searches altogether, but only because the work of the inventor WAS the prior art.

In this case I would not lay blame at the feet of the attorney who was asked by the defendant to perform a search. If I was to level any criticism, it would only be that the place to start is with the work done by the defendants competitors. Assuming one actually took some time to peruse the OG to identify matters of interest, this would be a relatively easy task. There are, of course, some who eschew even looking at published and issued applications. Frankly, I believe this approach to be a fool's errand. Better to face a potential issue in real time when changes can be made than to proceed in blissful ignorance and take an unvetted product to market.

Re: Re: Re: One aspect of this case gets me...

"In this case I would not lay blame at the feet of the attorney who was asked by the defendant to perform a search."

Maybe maybe not. I'm not 100% familiar with how attorneys conduct their searches, but I imagine that if I was one doing a search I might ask them "so, has anyone you know been doing work in this area of late?" And when they said, "why yes, the person we just copied!" Then I might search for that other company.

Getting fake opinions isn't legal for patent searches

It would be so easy to get fake clearances for all kinds of patents using this system. It's hard to find all the patents concerning any specific invention. But it must be done. You can't point a non-proven-competence lawyer at a patent database and call the search result within due diligence.
Would Sunbeam have done the same quality search if they had tried to patent the design. Heck no! Would they have bought the concept from someone else with that kind of patent search and paid cash. Heck no!

Re: Getting fake opinions isn't legal for patent searches

"You can't point a non-proven-competence lawyer at a patent database and call the search result within due diligence."

Actually you can if you're completely clueless about what art might be out there. This decision just effectively states that if there is a good reason for you to believe that someone has patented something you're planning to make you better tell your patent attorney searcher about those guys.

Re: Re: Re: Re: This is nuts.

i've an idea for a patent

I'm going to patent the process of ignoring common sense, being blissfully ignorant of human nature and applying the minimum amount of brain cells to deciding what is 'just'; in the the determination of legal decisions, and their briefs.

Then I'm going to sue the SCOTUS (and many other courts) to hell and back for patent infringement.

Unintended?

Considering all the concerns people already have about orphaned works, think of the massive chilling effects and unintended consequences here.

Truthfully, I don't think the consequences are unintended at all. I think the chilling effects are fully intended. This isn't the Supreme Court of yesteryear. This is the new, screw-the-little-guy Supreme Court.

Last Straw

I think this is for me the last straw. The corruption of copyright and patent law that began with the adoption of the name "intellectual property" for what had always been recognized as state-granted monopolies, and continued with the "Mickey Mouse Protection Act", and the issuance of patents on algorithms and business plans is now complete.

"Piracy" and willful patent and copyright infringement are now legitimate acts of civil disobedience against tyranny.

I'd come closer and closer to feeling that, but this really takes the proverbial cake.

Hoist the Jolly Roger in cyberspace and on the workroom floor until we go back to the terms of the Law of Queen Anne and the Statue on Monopolies of 1624! Everything else beyond that is fascist, crony-capitalist tyranny.

One possible benefit on the criminal side...

Police often have qualified immunity upheld by the courts, because willful ignorance of the laws is not the same as knowledge. All citizens are expected by the courts to educate themselves on the law, such that ignorance of the law provides no defense; Choosing not to educate yourself provides no shield. But if SCOTUS has ruled that willful ignorance equates to knowledge, and it applies to both criminal and civil law, it would effectively provide a precedent to strip police who deliberately avoid learning the limits of their authority of their qualified immunity!

Making up facts as you go along:

Mike, I have to say I am mighty disappointed in you in the way you have portrayed this case. Not only have you made a rather narrow ruling seem like the end of the world, you have grossly misrepresented the facts of this case. For instance:

First, the facts of the case. SEB created a deep fryer and got a patent on it. Entirely separate from this, Sunbeam decided it wanted a certain type of deep fryer that apparently had similarities to what SEB made. This isn't surprising. As we've discussed before, it's quite common that multiple individuals/companies have the same idea at the same time.

But that's not what happened here. Sunbeam wanted to start selling its fryers in 1997. SEB applied for a patent on its fryer in the late 1980's (May 9, 1988 to be exact). How is this 9-year difference in conception "the same idea at the same time"?

Sunbeam contracted out to appliance maker Pentalpha to make a deep fryer to its own specifications. Pentalpha, in researching the market, came across an SEB deep fryer that had no US patent markings on it, and built its own deep fryer, potentially using some of what it learned from the SEB deep fryer.

Potentially? Read the facts of the case! Pentalpha purchased the SEB deep fryer and "copied all but its cosmetic features". That's not "potentially using some of what it learned from the SEB deep fryer"; that's using the same damn fryer. Either you don't know what the word "potentially" means, or you are intentionally trying to shade the facts of this case.

Separately, it asked an attorney to do a patent search to see if its own deep fryer violated any patents -- and the attorney's search turned up nothing.

You omitted a critical fact of the case here: Pentalpha never told the attorney that its deep fryer was derived from a competitor's product. That's extremely relevant information, as it would at least allow the attorney to find any patents owned by that competitor which may be relevant to the apparatus of concern.

This is the part that does not make sense. If anyone has a patent on the copied device, it would likely be the entity selling the copied device. So why would Pentalpha deliberately withhold such information from an attorney conducting a freedom-to-operate search? What reason could there be for such conduct other than a desire to avoid being charged with actual knowledge of an infringed patent owned by that entity?

Honestly, Mike, your failure to cite these particular facts and to even do some basic questioning of Pentalpha's motives while shading the facts to make Pentalpha look like the good guy here strikes me as intellectually dishonest.

More misunderstanding

Mike, sorry for the frequent post, but I just found another instance where you misrepresent what happened in the case. In this instance, however, it appears that you just didn't actually read the full opinion by the Supreme Court.

Even worse, this appears to go beyond just the realm of intellectual property. Justice Kennedy was particularly spooked by the fact that this ruling -- in a very narrow area of civil law -- likely also applies to criminal law, without any thought at all given to what this might mean in the criminal context:

Actually, if you had actually read the decision, you'll note that the majority did not make up a new form of knowledge and say that it is applicable to criminal law. As can be clearly seen by the following passage by Alito, the majority took the law of mens rea from criminal law and applied it to patent law:

"The doctrine of willful blindness is well established in criminal law. Many criminal statutes require proof that a defendant acted knowingly or willfully, and courts applying the doctrine of willful blindness hold that defendants cannot escape the reach of these statutes by deliberately shielding themselves from clear evidence of critical facts that are strongly suggested by the circumstances. The traditional rationale for this doctrine is that defendants who behave in this manner are just as culpable as those who have actual knowledge. Edwards, The Criminal Degrees of Knowledge, 17 Mod. L. Rev. 294, 302 (1954)(hereinafter Edwards) (observing on the basis of English authorities that “up to the present day, no real doubt has been cast on the proposition that [willful blindness] is as culpable as actual knowledge”). It is also said that persons who know enough to blind themselves to direct proof of critical facts in effect have actual knowledge of those facts. See United States v. Jewell, 532 F. 2d 697, 700 (CA9 1976) (en banc)."

See page 10-11 of the slip opinion.

The Court later goes on to show that the doctrine of willful blindness is not some new concept, but rather a doctrine of criminal law that is at least as old as the country. Alito later discredits Kennedy's dissent with the following in Footnote 8:

"Unlike the dissent, we do not think that utilitarian concerns demand a stricter standard for knowledge under §271(b), see post, at 3 (opinion of KENNEDY, J.). The dissent does not explain—nor can we see—why promoting “ ‘the Progress of Science and useful Arts,’ ” ibid., requires protecting parties who actively encourage others to violate patent rights and who take deliberate steps to remain ignorant of those rights despite a high probability that the rights exist and are being infringed, see infra, at 13–14."

one important detail

You left out this very important point: Pentalpha did not tell its attorney that it had purchased and directly, deliberately copied the SEB fryer. If Pentalpha had informed its lawyer as to this fact, then the attorney likely would have found the patent. Because of this, the prior art search was just a cover, and "willful blindness" makes complete sense. That considered, I'm glad this patent litigation went in favor of SEB.